Biden’s $2.3 Trillion American Jobs Plan: Top Takeaways and Reactions for the SLED Market
Published: April 07, 2021
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The president’s massive $2.3 trillion proposal makes historic investments in sustainable infrastructure, home care, and the workforce.
Last week, President Joe Biden held a press conference to announce his nearly $2.3 trillion infrastructure and jobs proposal, known as the American Jobs Plan. The announcement was made from the Carpenters Pittsburg Training Center, where the president’s remarks were preceded by those of Mike Fiore, a Senior Line Worker for Duquesne Light. Fiore applauded the president’s proposal, emphasizing that it will boost the economy, prioritize union jobs, and create sustainable energy options.
The president then outlined his plan, which is meant to revitalize the U.S. economy and “put [the U.S.] in a position to win the global competition with China.” His proposal involves two parts: the American Jobs Plan and the American Families Plan. Last week’s press conference only focused on the jobs portion of his proposal, but he plans to discuss the family portion in the coming weeks.
If passed, the American Jobs Plan would fund major infrastructure projects across the country:
- Repair 20,000 miles of highways and roadways.
- Replace the 10 most economically significant bridges and repair 10,000 additional bridges.
- Improve rail cars and transit lines.
- Enhance the infrastructure that protects Americans from superstorms, like fire and drought.
- Install 500 electric vehicle charging stations along major highways and roadways.
- Build high-speed electric train lines from coast to coast.
- Manufacture electric cars and trucks.
- Transition the federal government’s fleet to all-electric vehicles.
- Replace 100% of America’s lead pipes, with an emphasis on school buildings.
- Ensure that all Americans have access to high-quality, affordable high-speed internet.
- Create clean power grids.
- Clean abandoned oil wells.
- Construct affordable housing that is energy efficient.
- Provide access to quality, affordable home- and community-based care that prioritizes home healthcare workers.
Biden’s proposal would certainly have a major impact on states and localities, as it calls for a massive green energy overhaul of the nation’s infrastructure, from transportation to government buildings to the power grid. The bill’s transportation initiatives focus mainly on electrification and mass public transit. By doing things like installing electric vehicle charging stations across the country, the Biden administration intends to make the nation’s major thoroughfares more amenable to electric vehicles. To incentivize people to purchase electric vehicles, tax breaks and other point-of-sale incentives will be implemented. The administration also intends to increase public transit connections between cities and their outskirts by building high-speed electric trains and increasing other public transit options.
However, the bill’s spending is much broader than transportation. Other major spending categories include home care, government buildings, manufacturing, research and development, water systems, the workforce, power grids, and broadband. At the heart of most of this spending is the intent to either convert existing infrastructure to clean energy or build new sustainable infrastructure, whether that be a school, affordable housing community, or power line.
The bill would also provide significant funding for workforce development and social assistance. “It's time to build our economy from the bottom up and from the middle out, not the top down,” Biden said during the March 31 press conference. “[This plan] builds a fair economy that gives everybody a chance to succeed, and it's going to create the strongest, most resilient, innovative economy in the world.”
Biden’s infrastructure proposal has been met with mixed reviews, particularly because it increases the corporate tax rate from 21% to 28% to fund its various initiatives. Critics of the American Jobs Plan have pointed out that many American companies may be forced to take their business overseas due to higher taxes.
Biden also claimed his plan would add 19 million jobs to the U.S. economy, however, a report by Moody’s Analytics revealed that it would actually add 2.7 million jobs over 10 years. Biden and other members of his administration have cited this same report in their estimates, but they are including 16.3 million jobs that Moody’s predicts will be created even if the president’s proposal never comes to fruition. Mark Zandi, Chief Economist at Moody’s Analytics, predicts that, as a result of the plan, 23,000 jobs would be lost in 2022 before the economy would add jobs in the ensuing years. Overall, the analysis offers a positive assessment of the American Jobs Plan in the long term, stating it “results in a stronger economy over the coming decade, with higher GDP, more jobs and lower unemployment.”
Amongst the nation’s governors, battle lines are already beginning to form. Republicans like South Dakota Gov. Kristi Noem disapprove of a bill they don’t even believe focuses on true infrastructure. “Biden's ‘infrastructure’ bill spends more on electric cars than on roads or bridges,” Noem wrote on Twitter. During an appearance on CNN, Mississippi Gov. Tate Reeves blasted the plan, describing it as “more like the Green New Deal than… an infrastructure plan.” He criticized it for spending more on Amtrak and public transit combined than it does on roads and bridges, as well as for the billions it proposes to subsidize electric vehicles. “That is a political statement. It’s not a statement on trying to improve our infrastructure in America,” he said.
On the other hand, Democrats like California Gov. Gavin Newsom are praising the plan for “[putting] forward a transformative vision for a healthier and cleaner future for our country.” Similarly, Connecticut Gov. Ned Lamont believes this is “exactly the kind of investment needed to move our country and [Connecticut] forward.” And, in Washington, Gov. Jay Inslee views the plan as “a tremendous step forward in the fight against climate change. It is a big, bold, but appropriately scaled plan.”
Despite this divide, both sides of the aisle have expressed a willingness to work together on the bill. Biden made that clear during last week’s press conference, saying he wants to have a “good faith negotiation” with Republicans. For Gov. Reeves, “if the Biden administration will do what the president has said he wants to do, which is work with Republicans, I believe we can come up with a plan that we can afford, one that we can pay for, and one that truly invests in the infrastructure needs of this country.” Only time will tell how much of this bill will make its way through Congress and to the president’s desk. But, one thing is for sure, it will not be an easy road to get there.